Financial Review: Howard Bancorp (NASDAQ:HBMD) vs. Northern Trust (NASDAQ:NTRS)


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Howard Bancorp (NASDAQ:HBMD) and Northern Trust (NASDAQ:NTRS) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Insider and Institutional Ownership

55.1% of Howard Bancorp shares are owned by institutional investors. Comparatively, 78.8% of Northern Trust shares are owned by institutional investors. 18.8% of Howard Bancorp shares are owned by insiders. Comparatively, 0.7% of Northern Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Howard Bancorp and Northern Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Howard Bancorp $112.47 million 2.65 $16.88 million $1.01 15.73
Northern Trust $6.90 billion 3.28 $1.49 billion $6.63 16.40

Northern Trust has higher revenue and earnings than Howard Bancorp. Howard Bancorp is trading at a lower price-to-earnings ratio than Northern Trust, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Howard Bancorp has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Howard Bancorp and Northern Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Howard Bancorp -15.10% 5.35% 0.65%
Northern Trust 20.72% 13.07% 0.89%

Analyst Ratings

This is a summary of recent ratings for Howard Bancorp and Northern Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Howard Bancorp 0 0 1 0 3.00
Northern Trust 5 4 6 0 2.07

Howard Bancorp presently has a consensus price target of $20.00, indicating a potential upside of 25.87%. Northern Trust has a consensus price target of $103.13, indicating a potential downside of 5.17%. Given Howard Bancorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe Howard Bancorp is more favorable than Northern Trust.

Summary

Northern Trust beats Howard Bancorp on 11 of the 14 factors compared between the two stocks.

About Howard Bancorp

Howard Bancorp, Inc. operates as the bank holding company for Howard Bank that provides commercial banking, mortgage banking, and consumer finance products and services to businesses, business owners, professionals, and other consumers. The company offers various consumer and business deposit products, including demand, money market, savings, individual retirement, and commercial and retail checking accounts, as well as certificates of deposit. It also provides commercial loans, such as lines of credit, revolving credit facilities, accounts receivable and inventory financing, term loans, equipment loans, small business administration loans, stand-by letters of credit, and unsecured loans, as well as equipment lease services; commercial mortgage loans for owner occupied and investment properties; construction loans; residential mortgage loans; and secured and unsecured consumer loans. In addition, the company offers wire transfer services; automated teller machines and check cards; and safe deposit boxes, as well as credit cards through a third party processor. Further, it provides merchant card, overnight sweep, check positive pay, and remote deposit capture services; and online and mobile banking services. As of December 31, 2020, the company operated through a network of 15 full service branches, as well as eight commercial lending offices located in Maryland. Howard Bancorp, Inc. was founded in 2004 and is headquartered in Baltimore, Maryland.

About Northern Trust

Northern Trust Corporation, a financial holding company, provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals worldwide. It operates in two segments, Corporate & Institutional Services (C&IS) and Wealth Management. The C&IS segment offers asset servicing and related services, including custody, fund administration, investment operations outsourcing, investment management, investment risk and analytical services, employee benefit services, securities lending, foreign exchange, treasury management, brokerage services, transition management services, banking, and cash management services. This segment serves corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors. The Wealth Management segment offers trust, investment management, custody, and philanthropic; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services; and private and business banking services. This segment serves high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately-held businesses. The company also provides asset management services, such as active and passive equity; active and passive fixed income; cash management; alternative asset classes comprising private equity and hedge funds of funds; and multi-manager advisory services and products through separately managed accounts, bank common and collective funds, registered investment companies, exchange traded funds, non-U.S. collective investment funds, and unregistered private investment funds. In addition, it offers overlay and other risk management services. The company was founded in 1889 and is headquartered in Chicago, Illinois.

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